The Statutory and Regulatory Scheme

AuthorKenneth L. Dorsney
chapter 1
The Statutory and
Regulatory Scheme
I. The Drug Price Competition and Patent Term
Restoration Act of 1984 (aka the Hatch-Waxman Act)
In 1984 the Drug Price Competition and Patent Term Restoration Act
of 1984, commonly known as the Hatch-Waxman Act, was passed into
law.1 The act was intended to “strike[] a balance between two potentially
competing policy interests—inducing pioneering development of pharma-
ceutical formulations and methods and facilitating efficient transition to
a market with low-cost, generic versions of those pioneering inventions at
the close of a patent term.”2
The U.S. Court of Appeals for the Federal Circuit’s 1984 decision in
Roche Products v. Bolar Pharmaceutical3 is often described as a catalyst
for the passage of the Hatch-Waxman Act. But the circumstances lead-
ing to the decision in Bolar and the passage of the Hatch-Waxman Act
shortly thereafter should be recognized as the culmination of many years
Update revisions prepared and reviewed by Jim M. Lennon, Partner, Young Conaway
Stargatt & Taylor, LLP,and Guy Donatiello, Senior Vice President, Intellectual Property,
Endo Pharmaceuticals Inc. The original authors of this chapter, in addition to Mr. Lennon,
are Christopher E. Jeffers, Ph.D., Partner, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C.; Malcolm K. McGowan, Ph.D., Partner, Cermak Nakajima & McGowan LLP; Bernard
A. Brown, II, Ph.D., Associate, Womble Carlyle Sandridge & Rice, LLP; and John B. Forrest,
IV, Associate, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
1. Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360cc; 35
U.S.C. §§ 156, 271), 21 U.S.C. 355(j)(2)(A), as amended by the Medicare Prescription Drug
Improvement and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003)
(collectively, the Hatch-Waxman Act).
2. See Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359, 1360 (Fed. Cir.
2010) (citing Andrx Pharms., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed. Cir. 2002)),
rev’d on other grounds, 132 S. Ct. 1670 (2012).
3. 733 F.2d 858 (Fed. Cir. 1984).
dor54588_01_ch01_001-028.indd 1 5/5/16 5:23 PM
of tension and shifting over how to best structure statutory incentives in
the pharmaceutical industry.
Movement toward the Hatch-Waxman compromise developed over
many years. Notably, in the late 1950s and early 1960s it became known
that the use of thalidomide, a sedative frequently prescribed to pregnant
women experiencing morning sickness, significantly increased the risk of
birth defects. The thalidomide scare led to the 1962 amendments to the
Federal Food, Drug, and Cosmetic Act (FDCA), requiring all new drugs
to be proven safe and effective prior to approval by the Food and Drug
Administration (FDA).4 The new requirements were seen to discourage
entry by generic manufacturers.5 Meanwhile, branded pharmaceutical
manufacturers pushed for additional protections against entry by generic
manufacturers. In 1978 President Carter recommended patent term res-
toration for pharmaceuticals and any other products that required regula-
tory review, to compensate for the time lost to the review, by extending a
patent’s term.6 By 1983, debate over the Drug Price Competition Act raged
in Congress.7 The Bolar decision in 1984 was an important event leading
to the passage of the compromise Hatch-Waxman Act, because the Bolar
decision highlighted the public policy tensions for the pharmaceutical
industry that only Congress could properly address.
Roche Products, a brand-name pharmaceutical company, was the
maker of Valium, the formulation for which was protected by patent.
Generic manufacturer Bolar Pharmaceuticals tested the chemical formu-
lation of Valium, before the expiration of Roche’s patent on that formula, to
determine if Bolar’s generic product was bioequivalent to Valium in order
to have an FDA-approved generic ready to market upon the expiration of
Roche’s patent.8 The determination of generic bioequivalence to a previ-
ously approved drug was and is necessary to obtain FDA approval for a
generic version of the drug.9
Roche brought a patent infringement suit against Bolar for this use
of Roche’s patented formulation, because a U.S. patent provides its owner
4. Pub. L. No. 87-781, 76 Stat. 780 (codified at 21 U.S.C. §§ 321, 331–32, 348, 351–53,
355, 357–60, 372, 374, 376, 381).
5. G.J. Mossinghoff, Overview of the Hatch-Waxman Act and Its Impact on the Drug
Development Process, 54(2)
187–94 (1999).
6. Id. at 187.
7. Bolar, 733 F.2d 865 (citing Drug Price Competition Act of 1983, H.R. 3605, 98th Cong.,
1st Sess. (1983) (amending 21 U.S.C. § 355(b) to allow faster marketing of new generic drugs
equivalent to approved new drugs); Patent Term Restoration Act of 1983, S. 1306, 98th
Cong., 1st Sess. (1983),
6863 (daily ed. May 17, 1983), 26 Pat. Trademark &
Copyright J. (BNA) 87–88 (May 26, 1983) (amending 35 U.S.C. § 155 to add to the patent
grant a period of time equivalent to that lost due to regulatory delay)).
9. 21 U.S.C. §355.
dor54588_01_ch01_001-028.indd 2 5/5/16 5:23 PM

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